Why are oligopolistic firms not productively efficient? OA. They eliminate consumer surplus in order to increase their profits. B. They are able to earn positive economic profits in the long run. OC. They produce at a level of output below the point where average total costs are lowest. D. They produce at costs below the cost of new entrants.

Why are oligopolistic firms not productively efficient? OA. They eliminate consumer surplus in order to increase their profits. B. They are able to earn positive economic profits in the long run. OC. They produce at a level of output below the point where average total costs are lowest. D. They produce at costs below the cost of new entrants.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.6IP

See similar textbooks

Similar questions

The figure shows the situation facing Smart Digit, Inc., a firm in monopolistic competition that produces calculators. What is the firm's profit-maximizing price? OA. $10 B. $4 OC. $8 OD. $12
Don't use chatgpt or any AI A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?
a. John operates a firm producing t shirts. There are many such firms producingidentical products to John. What market structure is this? Is it possible for John tomake a profit in the long run? Illustrate using an appropriate diagram. b. John decides to innovate his business and begins printing t shirts with customercreated content. Will John be able to make a profit in the short run and the longrun? Explain using relevant diagrams and comment on the implied market c. Provide a strategy for John to make greater than normal profits in the long run. Isthis likely to be the case in the market for this good?
Why are oligopolistic firms not allocatively efficient? A. They face a downward-sloping demand curve. B. They produce below the point where average total costs are lowest C. They produce at a point where there's deadweight loss. OD. They are able to earn positive economic profits. ← PREVIOUS ubmission SUBMIT VIEW
You are the manager of a firm that produces products Xand Yat zero cost. You know that different types of consumers value your two products differently, but you are unable to identify these consumers individually at the time of the sale. In particular, you know there are three types of consumers (1,000 of each type) with the following valuations for the two products: Consumer Туpe Product X Product Y $ 90 $ 60 2 70 140 40 160 a. What are your firm's profits if you charge $40 for product X and $60 for product Y? (Instructions: Assume all customers purchase each product.) $ b. What are your profits if you charge $90 for product X and $160 for product Y? c. What are your profits if you charge $150 for a bundle containing one unit of product X and one unit of product Y? $ 450 d. What are your firm's profits if you charge $210 for a bundle containing one unit of X and one unit of Y, but also sell the products individually at a price of $90 for product X and $160 for product Y? $ 450
Suppose that the manager of a donut shop tellsyou that he sold 220 donuts today, for a total revenue of $220 and average revenue of $0.90. What’swrong with this story?
O Price (AR) QUESTION 26 Why oligopoly firm earns abnormal profit in the long run, while a competitive firm earns normal profit only? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). В I A v Paragraph Arial 10pt x X2 田田田图 ABC Tave and Submit to save and submit. Click Save All Answers to save all answers. DELL Ex 田田

Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. The table to the right shows the firm's demand and cost schedules. What is likely to happen to the product's price in the long run? OA. It will increase. OB. It will remain constant OC. It will fall. OD. Cannot be determined without information on its long run demand curve. to select your answer. Quantity Price Total Revenue (Dollars) (Cases) (Dollars) $75 $75 70 140 65 195 240 275 1 2 3 4 6678 a 60 55 50 45 40 35 300 315 320 315 Total Cost (Dollars) $60 85 105 115 130 155 190 230 280
EOC 17.07 Imagine the potato chip market is made up of two businesses: Jay's potato chips and Leah's stackable potato chips. Each company has just come up with an idea for a new flavour of chip, which it would sell for $3 a bag. Assume that the marginal cost for each new bag of chips is a constant $1 and the only fixed cost is advertising. Each company knows that if it spends $5 million on advertising, it will get 2 million consumers to try its new product. Jay's potato chips' market research suggests that its new flavour does not have any staying power in the market. Even though it could get 2 million consumers to buy the product once, it is unlikely that they will continue to buy the product in the future. Leah's stackable potato chips' research suggests that its product is very good, and consumers who try the product will continue to be buyers over the ensuing year. On the basis of its market research, Leah's stackable potato chips estimates that its initial 2 million customers will…
You are hired as a consultant to a monopolisticallycompetitive firm. The firm reports the followinginformation about its price, marginal cost, andaverage total cost. Can the firm possibly bemaximizing profit? If not, what should it do toincrease profit? If the firm is maximizing profit, is themarket in a long-run equilibrium? If not, what willhappen to restore long-run equilibrium?a. P < MC, P > ATCb. P > MC, P < ATCc. P 5 MC, P > ATCd. P > MC, P 5 ATC
Restaurants offer related but differentiated products to their consumers. In the long run, new restaurants enter the market and imitate the cuisineand atmosphere of successful competitors. Howwould you expect a restaurant to set its prices inthe long run? Describe the relationship betweenprice and average total cost. Does a restaurantearn economic profits?
Kali is a dot-com entrepreneur who has established a Web site at which people can design and buy aring. Kali pays $600 a month for a Web server and Internet connection. The rings that customers design are made to order by another firm, and Kali pays this firm $20 a ring. Kali has no other costs. The table shows the demand schedule for Kali's rings. What is Kali's profit-maximizing output, price, and economic profit? Price (dollars per ring) 100 Quantity (rings per month) 0 80 20 60 40 40 60 20 80 0 100 Kali's profit-maximizing output is rings a month. Kali's profit-maximizing price is $ a ring. Kali's economic profit is $ a month.